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Trajectories of Land Acquisition and Enclosure: Trajectories of Land Acquisition and Enclosure: Trajectories of Land Acquisition and Enclosure: Trajectories of Land Acquisition and Enclosure:
DevelopmentDevelopmentDevelopmentDevelopment Schemes, VirtualSchemes, VirtualSchemes, VirtualSchemes, Virtual Land GrabsLand GrabsLand GrabsLand Grabs,,,, and Green and Green and Green and Green
AcquisitionsAcquisitionsAcquisitionsAcquisitions inininin IndonesiaIndonesiaIndonesiaIndonesia’’’’s Outers Outers Outers Outer IslandsIslandsIslandsIslands
John F McCarthy, Jacqueline Vel and Suraya Afiff1
AbstractAbstractAbstractAbstract
While the size and speculative nature of land transactions in the wake of energy,
food and climate crises has surprised observers, the reasons for partial implementation of
many land developments remains largely unexamined. This paper investigates trajectories
of land acquisition and enclosure by analyzing four acquisition processes in Indonesia,
those associated with rice, oil palm, jatropha and carbon sequestration, considering their
implications for comparative studies elsewhere. The article finds that current patterns of
land use change represent a continuation of ongoing land transformation processes. It
describes the logic leading to partial realization of large scale schemes. Highlighting the
importance of interactions between formal and vernacular rural land development
processes, the article concludes that many large scale schemes are better understood as
virtual land acquisitions.
IntroductionIntroductionIntroductionIntroduction
The magnitude and speculative nature of land transactions following the advent of
energy, food and climate crises have surprised observers. Some analysts have suggested
that up to as much as 227 million hectares have been sold, leased or licensed in large-scale
land deals over the last decade (Oxfam 2011). This ‘new bubble’ involving speculative
investments and large-scale land acquisitions (or ‘land grabs’) has inflated as investors
seek to exploit new market opportunities for food crops, industrial cash crops and bio-
energy production along with new enclosures of forest land for carbon sequestration (De
Schutter 2011, Deininger 2011). Careful analysis, however, suggests that we need to
avoid taking take these figures at face value. To be sure, it is tempting to lump together
disparate land transactions as ‘land grabs’. This might suggest a kind of teleology: large
corporations take over large areas for agricultural commodity production for export and
for carbon sequestration while displacing peasantries in the local domain. This may
resonate well with classical descriptions of the ‘slow dissolution of the peasantry’ as they
are dispossessed by ‘big, land estate and large-scale agriculture’ (Akram-Lodhi and Kay
2009, 7); and indeed, this dynamic can be found in specific cases. Yet only a fraction of
land developments associated with these transactions are ever implemented. According
to calculations from the World Bank (2011, 224), only 30% of developments are in the
initial implementation stage. To date the reasons for postponement and failure of these
projects remain largely unexamined.
2
This paper seeks to understand the logic underlying several different enclosure
processes, examining the dynamics shaping each in turn. We also address the question of
partial and non-implementation of apparently promising land acquisition plans. The cases
discussed are from Indonesia, the largest country in Southeast Asia, where extravagant
macro-economic, agribusiness and green agendas circulate around the new opportunities.
According to reports, state planners have allocated up to 3.5 million hectares for new food
estates (Media Indonesia 2011), and there are plans for a further 7 million hectares of new
oil palm plantations by 2020 (USDA 2010), alongside 9 million hectares of new timber
plantations by 2016 (Obidzinski and Dermawan 2010). In addition the Ministry of
Forestry aims to expand forest concession for non-gas and oil mining, to encompass 2.2
million hectares of ‘forest land’ (Jakarta Globe 2010). This sits alongside ambitions to
develop 1.5 million hectares of jatropha to meet the aspiration of making Indonesia ‘the
world’s first biofuel superpower’(I-Newswire 2010). Meanwhile, donors and carbon
investors compete to advance around 44 carbon sequestration (REDD+) projects that aim
to mitigate climate change (REDD-I 2011).
To investigate trajectories of land acquisition and enclosure, this article presents an
historical analysis of four large scale processes – those associated with rice, oil palm,
jatropha and carbon sequestration. Utilizing an actor-oriented approach, it explores the gap
between plans and implementation. It advances four arguments. First, it questions the
degree to which ‘land grabs’ to meet the new ‘green’ and food security agendas really
amount to a radical shift (e.g. GRAIN 2008). We argue against regarding these
acquisitions and green projects as a single, coherent process that explains all manner of
political-economic programs across a wide variety of settings. Rather, we argue for
understanding current changes as a continuation or re-intensification of ongoing
disaggregated processes that are transforming ‘outer island’ spaces.
Second, we place current development plans in the context of a longer history.
This longer historical context suggests that in many cases land acquisition plans and
developmental scenarios will continue to be problematized, resisted and only partially
realized, as they bump into existing land uses, patterns of resource access, ecologies and
rapid fluctuations in world commodity prices. Despite this history of failed large land
schemes, as developmental narratives take up new global concerns they continue to
legitimize large-scale land acquisitions in the same landscapes.
Third, , , , we demonstrate that rural landscapes are marked by overlapping land
claims, with competing indigenous and commercial smallholder land uses, or concession
licenses and land use plans. In this sense, rural landscapes work as a palimpsest; a
parchment where the effects of successive inscriptions and erasures associated with ‘legal’
and ‘vernacular’ processes can still be perceived.3 Vernacular land allocation and
transaction processes are embedded in, and constrained by, locally specific political and
market-based dynamics shaped by local understandings of identity and entitlement.4
While vernacular processes shaping land access and use can be decisive for land tenure in
‘outer island Indonesia’, formal land acquisition processes also remain critical. The
dynamic interaction between these processes in each case affects the extent to which
legalized acquisition processes lead to enduring land use changes.
3
Fourth, we argue that in many cases, regardless of legal provisions to the contrary,
actors engage in land acquisition processes without the intention to use the land for the
purpose mentioned in the plan or development license.5 Here we introduce the term
'virtual land grabbing' to characterize situations where, behind a façade of land
acquisition for a stated purpose, there lies an agenda to appropriate subsidies, obtain bank
loans using land permits as collateral, or speculate on future increases in land values. Our
argument here points to the centrality of agendas of land control – projects which
attempt to fix or consolidate forms of access to land based wealth – as the key to
understanding these phenomena (Peluso and Lund 2011). Distinguishing between ‘real’
and 'virtual land grabbing' requires a conceptual understanding of land acquisition as a
process. In the case of 'virtual grabbing' only a few initial stages of land acquisition or
enclosure processes occur; just sufficient to enable specific actors to pursue their own
interests, which may or may not depend upon land use changes actually taking place.
The findings in this article, based on our research in Indonesia, are highly
significant for wider discussions of ‘land grabbing’. First, the article highlights the gap
between plans as stated and schemes as implemented; showing that the mere
proclamation of a land acquisition in accordance with global discourses on food, climate
and energy crises can be sufficient to profit particular actors. Whether land schemes end
up being developed or not, these acquisitions are important, given that they lead to the
reworking of spatial plans and the issuing of land use permits. Moreover, working in a
dialectical fashion, one 'failed' scheme can later end up as a 'success': by serving as the
basis for the next set of schemes, the failed scheme plays a key part in the transformation
of rural landscapes. In this sense, all land initiatives affect the ongoing construction of
new patterns of ownership and control over nature in frontier areas, working to
reconfigure or to entrench political power, and providing new opportunities for
particular actors while marginalizing others. Our article also highlights how an analysis
in terms of virtual land acquisitions might help to explain the gaps between plans and
implementation well beyond Indonesia. Documentation on land grabs in other countries
shows similar findings: land acquisition may not be as massive as suggested (Cotula et.al.
2011)6; the acquisition process is often decentralized with local actors playing a key role
(Borras and Franco 2010, Deininger 2011);and planned projects often are only partially
realized, or may be unlikely to succeed (Ness et al. 2010). Further, existing policies to
avoid speculative uses – such as virtual land acquisitions – tend to be poorly implemented
(Deininger 2011). Finally, this article demonstrates that a broader consideration of the
functions of land appropriations, including consideration of virtual land acquisitions,
reveals the need to reconsider the impact and significance of ‘land grabs’ alongside the
policies driving the expansion of corporate agriculture and ‘green appropriations’.
This paper investigates trajectories of land acquisition and enclosure associated
with development schemes, virtual land grabs and green acquisitions. It advances the
four key arguments (outlined above) through an investigation of four large enclosure
processes– the processes associated with rice, oil palm, jatropha and forest sequestration.
Before considering these four large enclosure processes in turn, the next section will
discuss the centrality of state developmental rationalities that target the 'outer islands' for
large land projects in Indonesia.
4
Land acquisition and enclosure in Land acquisition and enclosure in Land acquisition and enclosure in Land acquisition and enclosure in Indonesia's Indonesia's Indonesia's Indonesia's outer islandsouter islandsouter islandsouter islands
To explore our case studies of large enclosure processes and to understand how this leads
to our conclusions, we need to first discuss the history of projects to turn nature into
economic or green resources. First, it is important to distinguish between the densely
populated centre of the country, Java and Bali, and the islands that have customarily been
referred to as ‘the outer islands’.7 Java and Bali are the centers of intensive rice cultivation
and are places where land tenure is relatively clearly defined. In contrast, Sumatra and
Kalimantan are large islands with huge natural wealth, while the smaller islands of Nusa
Tenggara Timur (NTT) are much dryer and less fertile. Farmers in these ‘outer islands’
have combined various forms of swidden cultivation with cash crop production. In many
situations these diverse livelihood approaches have been ‘rational economic and
environmental choice for farmers’ (Mertz et al. 2009, 259).
Over the longer term, macro-economic policies have focused on the use of forests
and other land types in the ‘outer islands’ as catalysts for a structural transformation of
the Indonesian economy and as sources of wealth accumulation for privileged politico-
bureaucratic actors. We can distinguish a sequence of six transformational historical
moments.8 An initial colonial phase focused on plantation development, centred on the
plantation belt of North Sumatra. After the late 1960s, the rise of markets for timber and
the emergence of technologies to exploit forests on a large-scale led to a focus on
industrial logging. A third stage, focused on transforming ‘forest’ into food crop
development areas, supported by a developmental discourse advocating self-sufficiency in
rice. This project formed part of a state development strategy that involved a large-scale
colonization project – the well-known transmigration program. Fourthly, in the 1980s
Indonesia began to transform logging and food estate areas in Sumatra and Kalimantan
into oil palm and timber plantations, supported by a developmental discourse that
advocated increasing non-oil export earnings and diversifying employment opportunities.
Rising world crude oil prices and recognition of climate change has now precipitated a
fifth stage. This has inspired the Indonesian government’s policy for biofuel production in
2006, with jatropha as a ‘green champion’ biofuel crop. Finally, as markets have emerged
for the carbon locked up in forests and peat lands, the prospect has arisen of green
appropriations for carbon sequestration. This paper analyzes the latter four processes in
this sequence: rice for food security; oil palm for economic growth; jatropha for green
biofuel; and forest projects for carbon sequestration. In all four phases, a strong macro-
policy narrative has legitimized large land acquisitions and state involvement. This paper
uses these four large enclosure processes as case studies, to investigate trajectories of land
acquisition and enclosure, and to advance our four key arguments.
Despite shifting policies over time, Indonesian governments have always
supported transformative processes in landscapes. Successive state planners have
conceived ambitious national projects to turn nature into economic resources, re-
moldinglandscapes as well as ‘indigenous’ land uses in desired ways (Scott 1998,
McCarthy and Cramb 2009). Early colonial administrations appropriated land to facilitate
the objective of developing western enterprises. At this time land alienation was ‘never a
5
problem’, as it was facilitated by colonial land law (Furnivall 1956, 337). After
independence, state policies and laws continued to facilitate the allocation of land to
plantations, and were reworked to support changing national development strategies.9
Advancements in technology and infrastructure enabled new resources to be accessed and
used, creating new market opportunities and developing land markets (Wallace and
Williamson 2006). This led to shifts in what is valuable and hence worth extracting or
otherwise using (Schmink and Wood 1992). One land development project therefore
gives way to another.
There are several reasons why Indonesian land development policies continue to
target the outer islands. Firstly, the outer islands are perceived as having abundant
uncultivated or ‘marginal’ land, and low population densities. Additionally, customary
land rights in these areas tend not to be formally recognized; state institutions are weaker;
and legal provisions governing land transaction tend to be poorly implemented. Many
resource-rich areas in the outer islands retain a 'frontier’ character: they are spaces in
rapid transition, places where the state institutions and legal frameworks that might
protect local inhabitants tend to be weak. More recently, even those outer islands that are
relatively resource-poor have become the focus of plans for resource exploitation, with
growing attention to 'marginal land'.
Indeed, the idea of ‘empty’, 'reserve' or ‘marginal’ land is central to the ‘land grab’
scenario set out in the literature, concepts that render areas classified as ‘public land’
available to appropriation. Typically this scenario is seen to involve the transition of
‘reserve land’ into production, along with the dispossession and the marginalization of
existing landholders (Borras and Franco 2010, 9-10). The term ‘marginal land’ has
various meaning in different disciplines (Tang et al. 2010, 113-4). For economists, land is
marginal when the result of cost-benefit analysis is negative. Assessments also consider
land marginal if it has poor quality, is remote, is arid, infertile or lacks infrastructure (e.g.
roads, electricity). Administrators can classify land as ‘marginal’ according to a number of
categories. Temporarily unused lands include land usually cultivated, but that is
purposely allowed to stay idle for more than one year (FAO 2006), meadows for herding
livestock, and a category of ‘other dry lands’. These technocrats’ and administrators’
categories feed into the imaginative projects that national planners develop for 'empty
land', providing for the reshaping of both places and processes (Tsing 2005, 32).In short,
the ‘outer islands fit the profile not only of countries and landscapes which investors
prefer to target, but also of locations for which large-scale land acquisitions will create the
greatest risk of negative environmental and social outcomes (Deininger 2011, 224).
Although land schemes in Indonesia often include commitments and promises
regarding poverty alleviation or creation of rural employment, only in some cases is an
actual improvement in smallholder livelihoods observed (McCarthy et al. 2012). Meanwhile, processes such as logging, large-scale oil palm and timber plantations,
exclusionary conservation zoning, resettlement schemes and the emergence of cash crop
commodity booms continue to significantly alter land uses. The impact on agrarian
structures is seen clearly in successive agricultural censuses. Between 1983 and 2003 the
Gini coefficient for land distribution in outer island Indonesia increased from 0.48 to
0.58, indicating rapidly growing inequality in land ownership. In two ‘outer island’
6
provinces where researchers have carried out longitudinal surveys, South Sumatra and
South Kalimantan, the percentage of households in the category of ‘marginal farmers’
(petani gurem), with landholdings considered too small to meet more than subsistence
requirements, have increased from 9% to 20% and from 30% to 40% in each province
respectively over 20 years (Lokollo et al. 2007). It is possible to read these changes as
processes of de-agrarianization, representing a diversification of livelihoods that are now
less tied to the land. As Rigg (2006) argues, an agrarian crisis may have been averted
through a shift in livelihoods to non-farm activities, and to economic activities beyond
the village. To be sure, a dynamic class of entrepreneurial smallholders is emerging that,
together with domestic investors, is deriving a lucrative livelihood from boom crops such
as oil palm and cocoa (Hall 2011). As these emergent ‘progressive farmers’ buy up
surrounding areas of land, their prosperity is linked with problems of agrarian
differentiation and dispossession (Li 2002,McCarthy 2010, Hall 2011). And despite this
new wealth, in areas distant from the markets provided by industrial and urban centres,
opportunities for livelihood diversification remain limited. As many may only adjust
through ‘distress diversification’ (Rigg 2006, 194), it is clear that very large numbers of
rural poor remain. Indeed, analysts within Indonesia are worried about the shift in
patterns of land ownership (Lokollo et al. 2007). In many remote agrarian settings outside
Java and Bali, it remains less likely that those rendered marginal to the agrarian transition
– or cycle of enclosures – will find better livelihoods on smaller areas of land, in the
absence of supporting rural policy, or in rural markets with a low capacity to absorb
labour (Li 2010). Civil society organizations that could support the marginalized are
absent or weak in these areas.
The legal system in Indonesia may intend to protect the land rights of its citizens,
including those who live in areas targeted for land acquisition. However, land rights are
often insecure and contested. For example, state policies and laws that facilitate the
allocation of lands to plantations have tended to be used in new ways to support national
development strategies. Such transformations have been relatively easy in forest areas.
Indonesian Forestry law classifies around 60 percent of the country’s land as ‘state forest,’
over which the Ministry of Forestry asserts control. In resource-rich outer islands, this
percentage is often even higher; in Central Kalimantan it is 82 % (Afiff et al. 2010, 37).The Ministry of Forestry asserts the legal authority to allocate use of these areas, and
to issue licenses to private companies for forest exploitation. Although Indonesian law
does allow for state recognition of customary land rights, in practice there are many
requirements. Most of all, this needs a strong political intension – an element that has
tended to be missing. Consequently, such recognition is rarely accomplished (Bakker
2009). As a result, so-called ‘state forests’ include many cultivated fields and villages. For
example, in the Central Kalimantan case discussed below, the land mapped as ‘state forest’
contains 187 villages with 350,000 inhabitants.
The process of decentralizing the state, which began in 2001, has complicated this
further by increasing procedural and institutional complexity. This has exacerbated the
lack of integrated institutional arrangements between key actors and agencies, without
providing effective systems and structures to hold state-based actors accountable. Given
the conflicts of interest between various state agencies, actors can utilize the
7
inconsistencies regarding authority within the state legal system for their own ends, to
advance particular interpretations on the status of land, and to contest particular
allocations. Foreign companies wanting to access land face the challenge of identifying
which state institutions to negotiate with to obtain legal permission to start operations.10
‘Fuzzy’ land rights, in a context of overlapping tenurial regimes and unclear, complicated
or conflicted procedures, mean that investors need to navigate elaborate network of
permits and recommendations to proceed. Yet, as Ho (2001) suggests, ambiguity in
property relations can serve certain purposes. It allows communities, corporations and
other actors to advance competing agendas and definitions, seeking justification in
different areas of law. It also provides state based actors with maximum discretionary
authority, allowing them to allocate development rights, to obtain political capital and
opportunities for rent seeking. The downside is the ‘high risk that the deliberate
institutional ambiguity becomes an instrument in the violation of villagers’ interests’ (Ho
2001, 421). Where disputes are resolved by recourse to power or coercion, land conflicts
remain extensive.
Decentralization of government authorities to the districts and provincial
governments has exposed the reality that, behind the facade of policy narratives, the state
functions as a cluster of institutions (Barker and Van Klinken 2009, 40-42). Politico-
bureaucratic actors operate within a clientelist network that encompasses parties and
corporations. In outer island Indonesia, actors thrive or flounder depending upon their
control of rents derived from the resource sector. Following decentralization, District
Heads are directly elected, and regional governments have a more formal role in the
allocation of land use permits. These dynamics make regional governments responsive to
locally powerful actors and interest groups, and those able to invest in a particular region,
arguably dampening the influence of national policy agendas. These developments have
influenced the proliferation of types of actors who are engaged in or benefit from large
land schemes.
Taken together, these dynamics make it more difficult to locate a ‘land grabbing’
process that corresponds to a single, coherent or intelligible process of agrarian transition
‘that assumes a linear pathway, and a predictable set of connections’ (Li 2010, 69). What
initially appears as an archetypal ‘land grab’ may turn out to exist within a virtual reality
of state spatial planning and land development permits, or may work to a logic that differs
from the formal policy intention.
We now turn to considering how the four key arguments are demonstrated within
our four chosen case studies: the key food crop (rice); the key industrial cash crops (oil
palm); biofuels (jatropha); and finally forestry (carbon sequestration). We focus on the
degree to which processes of land appropriation associated with each commodity is
leading to dramatic transformations in land uses and property relations, and the question
of who benefits in which way.
Rice and food securityRice and food securityRice and food securityRice and food security
8
We begin our discussion of the trajectories of land use acquisition and enclosureby
considering the first of the four processes: large scale enclosure processes motivated by
the pursuit of food security or food self-sufficiency. Historically food self-sufficiency
represents a long term concern of Indonesian policy makers and has motivated national
projects to grow rice in outer island areas. Rice, as Indonesia's main staple food, plays an
important role in state efforts to maintain political stability, with policy makers reluctant
to become overly dependent on fluctuating international markets (Timmer 1993). A food
crisis will create complex political problems (Eifert et al. 2003), potentially creating
massive social unrest that can be mobilized by political actors to topple a government. As
an example, in the 1960s, 600 percent inflation and widespread food shortages
contributed to the fall of the Sukarno regime. The next president, Suharto, responded by
prioritizing self-sufficiency in rice production, including access to rice for the poor, and
stability in rural areas. State policies included subsidies and market interventions
involving BULOG, a state agency that set out to maintain adequate rice supplies at
affordable prices. State revenues from the 1970s oil boom were used to improve
agricultural infrastructure, to supply low-cost agricultural inputs and stimulate the
introduction of high yielding rice varieties.11 The rice self-sufficiency policy appealed
strongly to nationalist sentiments, and symbolized the Suharto regime's success in the
mid-1980s.However, by the early 1990s national rice production could not keep up with
increasing consumption.
As a solution, the Suharto government established a one million hectare rice
cultivation project in Central Kalimantan, the ‘mega-rice project’.12 Because the area
consisted of undisturbed peat land, environmental groups argued that the project would
have devastating ecological and social impacts. Suharto's authoritarian regime was not
responsive to opposition criticism. The project is considered by some to have displayed
much of the hubris of other examples of ‘high modernism’; a clear attempt to use
centralized planning and rational engineering to remake a social and natural order to
achieve a realizable utopia (Scott 1998).
The project is now seen as a failure, due in large part to the unsuitability of the
land for rice cultivation, and the devastating impacts on the environment and the
livelihoods of the thousands of people within the project area. As in many earlier
transmigration schemes in peat swamp areas, technocratic planners failed to learn the
lessons offered by traditional farming techniques regarding choice of plants and
cultivation methods on marginal soils. Engineering failures left upstream areas drought
stricken in the dry season, and flooded in the wet. This, together with forest fires that
destroyed rattan gardens, ensured the collapse of the livelihoods of indigenous people
over a wide area. At the same time, pest infestations led to failure of the agricultural
efforts of many Javanese in-migrants, encouraging many to take up illegal logging or to
return home after their period of government support ended (McCarthy 2012). The
mega-rice project was not, however, a failure for all: it provided economic benefits
through logging and the supply of heavy equipment (Suyanto et al. 2009, ii). In December
1999, after the fall of Suharto, the project was terminated. It stands as an example of
how, even with extensive investment in food production, and even with the support of a
9
powerful developmental state and major technological inputs, there is no guarantee of
success.
The post-Suharto period saw several shifts in how state planners addressed the
food security issue (Neilson and Arifin 2011). Under a more market-focused polity, after
2005 the Susilo Bambang Yudhoyono (SBY) government began attempting to secure ‘food
security’ via imports. Indonesia has since become the fourth largest global rice importer,
and this policy has been subject to harsh criticism and has become a political resource for
government critics. In response to such criticism, and to the apparent challenges of
accessing rice in the international market, since then agricultural policy makers have
shifted back to supporting more intensive agricultural production on underutilized or
‘idle land’ in outer island Indonesia.13
In 2008, the Wall Street Journal reported that a project in Papua province was’ the
latest example of a new trend for developing countries to lease farmland to overseas
investors in order to profit from rising global food prices’.14 In the project in question, the
local District Head held the political ambition to develop Merauke into the center of rice
production in eastern Indonesia (Ito et al. 2011, 3). He regarded food estate development
as an opportunity to tap into corporate financing and advance the cause of establishing
South Papua Province (Caroko et al. 2011, 15). In 2006, the national government
supported the idea of food estate development, and designated Merauke as 'the national
food basket' (Ito et al. 2011, 3), echoing Dutch colonial policies in 1939 in the same area
(Manikmas 2010). Initially the plan was to establish the Merauke Integrated Rice Estate.
In 2009, when newspapers reported that rice would be exported from Merauke to Saudi
Arabia, the project's goals were adjusted and framed more explicitly in terms of ‘food
security’, suggesting a throwback to mega-rice project style interventions (Media
Indonesia, 2011b). 'Energy security' became a second goal of the estate development, and
in 2010 the Merauke Integrated Energy and Food Estate was launched. The Indonesian
conglomerate Medco (which was also active in logging) had been offering financial
backing and assistance to find foreign investors for the project. Medco proposed that at
least a million hectares in Merauke should be allocated for production of sugar cane,
sorghum, rice, soybeans and maize; and strongly promoted this view to the president
(Down to Earth 2008). As of 2011, there are also plans to open 2 million hectares of new
food estates in Sumatra and Kalimantan (Media Indonesia 2011c). Given the political
importance of rice, however, the national government has faced political difficulties in
attempting to obtain foreign investment to take control of these vast areas of land to
produce rice for export. The food security issue posited limits to the ‘land grab,’ by
ensuring that food estates focus on domestic ‘food security’ issues. Moreover, as with the
earlier case, these land acquisitions occur in more ‘peripheral’ areas unsuitable for
intensive rice cultivation.
The political sensitivities raised by the project created other obstacles to
implementation of the million hectares food estate in Papua. Given the scarcity of labour
in frontier areas, the mega-rice project would bring many migrants into Papua. Such
immigration has often been associated with ethnic tension, given the difference in
cultural practices between indigenous people and Javanese migrants. Some Papuans
would view the practice of bringing Javanese labour into Papua as ‘internal
10
colonialization’, and the project may well inflame separatist grievances. Taken together,
this has made large investment in Papua more complex. In August 2011, the difficulties of
freeing up the land, together with the objections of indigenous communities and a new
District Head, came to a head, forcing the Minister of Agriculture to announce that food
estates projects would be moved to East Kalimantan (Jakarta Globe 2011). With large
areas now subject to land development licenses, the Merauke area is open for
development, and rumours have continued to circulate that the area may still be
developed for oil palm.
To sum up then, contemporary large scale acquisitions motivated by food security or food
self-sufficiency agendas are congruent with earlier historical experiences. However, given
the social, political and environmental constraints, there appears to be inevitability to the
partial realization or failure of many schemes. As in the other three processes to be
discussed below, interactions between formal and vernacular processes of rural land
development proved critical. Yet, even when acquisitions remained ‘virtual’, as in the one
million hectare scheme, they have allowed actors to pursue interests (e.g. timber
extraction) that did not require successful rice production. Further, the ‘failed’ acquisition
process proved critical in the wholesale transformation of the landscape. In the ex-mega
rice area in Central Kalimantan, the district government has issued plantation permits in
an attempt to attract investors. The district could readily do this because the mega-rice
project had already rezoned this deep peat forest area for agricultural production. By
2010, twenty three oil palm plantation companies had been granted such licenses (Afiff et al. 2010). The next section examines enclosure processes associated with oil palm.
Oil palm and export earningsOil palm and export earningsOil palm and export earningsOil palm and export earnings
We now continue our discussion of trajectories of land use acquisition and
enclosure by considering the development schemes and virtual land acquisitions
associated with oil palm. In the 1980s, Indonesian state planners began to realise the
developmental potential of oil palm. Since then, a developmental narrative has
underpinned practices that have continued to attract investments and loans. As
articulated by state officials, this narrative focuses on potential land as a lure to capital
investment in a key global boom crop (McCarthy and Cramb 2009). Ever-rising prices in
a global market have sustained an oil palm bubble that underpins this narrative. While
there have been dips in global prices, these have quickly rebounded. After the 2008 price
collapse for example, prices increased by 15 percent price by early 2011.15 With global
demand increasing, and with good crop yields, the expansive phase continued. As
investors rely on the financial reality that oil palm production will deliver a high rate of
return, government decision makers have continued to develop exuberant oil palm
development plans.16
Previously, under the New Order, various policies provided for smallholder out-
grower schemes, which allowed for more indirect forms of control over production in
smallholder areas. Under these contract schemes, smallholders would retain legal title and
would be integrated into global supply chains through the contract form. A significant
body of research demonstrates that, under favourable conditions, smallholders can obtain
11
income from oil palm significantly higher in terms of return-to-labour than other options
(Rist et al. 2010). Successfully integrated smallholders have experienced the positive
aspects of insertion into highly productive, intensive agricultural systems. As a corollary
of smallholder schemes – and the emergence of an independent smallholder sector – the
area cultivated by smallholders has grown by 2 million hectares since 2000, and in 2009
accounted for approximately half of the total area under oil palm (USDA 2009). However,
small holders who have been left out, or included on less favourable terms, suffer as their
agricultural products and rural wages fail to keep up with food price increases. Many are
forced to sell up land under livelihood crises (McCarthy 2010).
At the national level, planners consider very large areas of ‘public land’ to be
available for plantations development. In 2004 the Directorate General of Plantation
Production and Development estimated that 32 million hectares were suitable for oil
palm production. Indeed planners had already rezoned large areas, previously designated
as ‘forest’, for oil palm cultivation. Between 2000-2009, authorities allocated
approximately 10 million hectares of new land licenses to domestic and international
investors (USDA 2009). The national daily Kompas stated that by 2010, district
governments across the country had issued initial plantation licenses for over 26 million
hectares (Pontianak Post 2011). The national government had set a target of 15 million ha
of oil palm by 2020;although by 2010 oil palm plantations encompassed 7.56 million ha
(USDA 2010). Although actual cultivation is conducted at a fraction of the scale
mentioned in initial plans and reports, the cultivation, processing and export of oil palm
remain very significant activities. Every year, 33 oil palm companies manage to open
around 300,000-400,000 new hectares (Teoh 2010, Pontianak Post 2011).
In the context of the oil palm boom, the regional press illustrates the inflated,
speculative nature of land acquisitions – or virtual land grabs – associated with this
booming sector. During 2009-2010, West Kalimantan newspapers reported government
estimates that up to six million hectares of ‘potential land’ and 'critical land' in the
province that could be made available for oil palm. However, reports also noted
plantation developers’ lack of capacity to make use of this land: by late 2010, only 35% of
the 1.5 million ha that the provincial government had zoned for oil palm had already
been planted (Kapuas Post 2009). Government statistics revealed that companies were
only planting 20,000 ha per year. Development permits became objects of investment by
speculators with little immediate prospect of plantation development over much of the
land subject to development licenses.
Private and state companies had accumulated ‘land banks’ – land under various
licenses that are currently inactive but are set aside for later development – estimated to
extend to between 6.5- 7 million hectares by 2008 (USDA 2010). Outside Sumatra, oil
palm processing and transportation infrastructure has remained less developed.
Consequently, licenses are much more valuable close to the infrastructure required for
plantation development.17 Unused plantation licenses tend to work as ‘development
options’ – or amount to ‘a monopoly right to buy or use’ – that allows for the possibility of
either developing a plantation or selling on the opportunity. For entrepreneurs without
the capital to actually invest in growing oil palm, initial investments for obtaining
licenses tend to pay off because if the holder of the plantation permit is unable to proceed
12
to the plantation stage, they can later trade the permit in a rising market and hence
obtain a return on their initial investments. As new investors need to negotiate with
those holding these relatively scarce ‘development options’, the investment is potentially
very lucrative. This is particularly the case given the failure of state authorities to make
use of provisions allowing for the cancellation of non-performing plantation concessions.
Large-scale foreign investment involving direct control over large areas of land
plays a key role in most ‘land grab’ scenarios. Indeed, foreign investment remains
significant, especially from other developing country sources. It was reported in 2011 that
foreign investors own 25 percent of around 2 million hectares of oil palm plantation area
in Riau. Malaysian investors have also been carrying out intense plantation expansions in
West Kalimantan, buying up around 50 percent of oil palm plantations in this province
(Jakarta Post 2011).
Domestic and transnational players often play complementary roles (Cf Borras and
Franco 2010). Rather than leaving themselves open to the accusation of engaging in ‘land
grabs’ by taking up direct ownership of land under poor governance arrangements,
foreign investors can be ‘silent partners’ of local firms in food and agro-fuel projects. To
give just one example, in May 2008 it was reported that Bakrie Sumatera, a branch of the
Bakrie conglomerate, was investing US$260 million to double its plantation holdings,
raising $80 million from an international equities consortium (Jakarta Post 2008).
However, integration into global production networks does not necessarily require
direct control over production by investors. Large-scale palm oil buyers (e.g. Unilever)
may sit at the downstream end, purchasing the undifferentiated product in bulk through
globalized value chains. As buyers in decentralized global production networks, they can
avoid some of the opprobrium associated with problems in the upstream sector where
production takes place, reducing any negative impacts on their brand names through
discontinuing purchases from problem companies and supporting certification schemes
that provide for codes of conduct regarding land acquisition policies.
Clearly oil palm expansion is inserted into a particular local political-economic
context that shapes outcomes. Following decentralization reforms, district officials hold
key powers within networks involving local businessmen, brokers, investors, local
companies, local populations and large corporations. For district governments a failure to
attract investors would be perceived as an inability to deliver the maximum development
benefits. On the other hand, local governments who attract investors and issue large
numbers of permits gain directly – from entitlements in oil palm schemes and through
support for electoral programs in return for services rendered. Oil palm, in the words of
one observer, has emerged as an ‘elite business between investors and rogue officials
(oknum) in the regional elite who possess control of the land’. The low realization of land
development compared with the total number of permits issued indicates the intensity of
the practice of ‘land division’ and brokering of land permits by rogue regional officials
(Pontianak Post 2009). In the absence of effective forms of accountability, too often
customary and community leaders are involved in ‘freeing up’ land, in land sales
manipulated by village heads and brokers.
The terms under which smallholders engage with oil palm have changed
remarkably over the last decade. Government policies have consistently sought to
13
liberalize investment requirements, for instance seeking to increase the length of
agricultural concessions from 25 to 95 years, and allowing direct foreign investment in
the sector.18 A new ‘partnership’ (kemitraan) policy privileged private sector partnerships
with smallholders. Under this model, benefit and land sharing arrangements are to be
negotiated directly with landowners in the field. Rather than providing 70 percent of an
oil palm development to smallholders as under previous schemes, the core or ‘nucleus’
estate is only obliged to return 20 per cent of the scheme land to villagers, retaining up to
80 per cent of the land as its plantation estate. This amounts to a shift towards
decentralized-localized community based negotiations that are easily manipulated.
Large-scale violations continue despite codes of conduct and legal innovations that
provide for elements of ‘free, prior and informed consent’. This is because too often the
local actors – including community leaders and state officials – who play a mediating role
in such processes have an underlying interest in ensuring that land acquisitions go
ahead.19As land and benefit sharing arrangements deteriorated under the new schemes,
some might argue that this amounts to a type of reverse land reform or land grab. If
plantation development that includes smallholders will only occur in accordance with
policy that provides up to 80% of the development area to estates, this will exacerbate the
increasingly salient problem of ‘marginal farmers’ who have landholdings deemed be too
small to meet subsistence requirements.
When the ‘sweet promises’ made by companies in the process of ‘freeing up’ land
are not realized, large numbers of conflicts emerge. Too often farmers lose out at the
point that customary or uncertified property rights are converted into state recognized
land tenure for concession licenses under district supervision. This is because land
negotiations are left to local land owners and investors, leaving outcomes susceptible to
the differences in power and knowledge between these two parties. There are conflicts
over land purchases and compensation processes deemed to be unjust, over the
perceptions that plantations have failed to return smallholder ‘plasma’ entitlements, over
the lack of extension and development assistance to smallholders, and over profit sharing
arrangements from ‘fresh fruit bunches’ at the farmer level that are deemed unjust
(Borneo Tribune2010). NGOs claim that the level of conflict is growing during the era of
decentralized-localized community based negotiations.20
In conclusion, the oil palm related processes follow a characteristic pattern of
fragmented, differentiated, and decentralized land acquisitions involving various
coalitions of actors that parallels the other cases. Oil palm has emerged as the priority
crop for many actors, particularly as it offers lucrative opportunities; not only from selling
the oil. Despite the potent forces pushing real, large scale transformations, we still find a
significant gap between projects, plans and booster rhetoric and actual practices on the
ground. In parallel with the pattern found in the other processes discussed in this paper,
the oil palm boom also corresponds with an extraordinary number of ‘virtual
acquisitions’– speculatory activity involving the pocketing of permits. Critics have
subjected palm oil palm expansion to strong criticism, particularly for its environmental
impacts.21 Yet, in comparison with the other processes examined in this paper, oil palm
has potentially the most significant implications for the livelihoods of local smallholders
and agricultural labourers. Policy choices prefer large-scale, capital intensive investments,
14
over more smallholder focused initiatives that might provide for greater smallholder
inclusion. In addition to oil palm, companies and governments do consider the potential
of alternatives crops more suited to ‘marginal areas’, and the next case discusses land
acquisitions associated with one such crop.
JatrophaJatrophaJatrophaJatropha and green biofuelsand green biofuelsand green biofuelsand green biofuels
We now turn to our third enclosure and land acquisition process that associated with
jatropha. From 2003 onwards, a new set of large-scale land acquisitions focused on areas
that planners had considered ‘marginal’ and thus economically uninteresting. These areas
had yet to experience such large land projects. Yet, seen from a national perspective, this
is a continuation of earlier policies to turn nature in the outer islands into economic
resources. Rising world crude oil prices and attention to climate change inspired the
Indonesian government’s policy for biofuel production in 2006. This biofuel policy aimed
at turning ‘marginal’ or ‘degraded’ areas into biofuel production zones. Interventions
would need to develop areas with unsuited ecologies or poor infrastructure in other ways.
Foreign investments in biofuel plantations would yield renewable energy, create
employment and contribute to poverty alleviation. For example, projects could cultivate
jatropha, a crop deemed suited to ‘marginal’ dry land, in arid areas of the province Nusa
Tenggara Timur (NTT). Unlike in Kalimantan or Papua, spatial planning processes
mapped only a quarter of the land surface in this province as forest, and classified around
forty percent as unused or very extensively used land. In 2007 provincial and national
newspapers reported the first initiatives for large plantations in this province, which is
one of the poorest areas of Indonesia.22
In the early 2000s, boosters claimed that Jatropha Curcas was the ideal crop for
producing energy from such marginal land without large inputs. Jongschaap et al.
(2007, 5) listed 11 popular claims about the crop in 2007, including that the crop reclaims
marginal soils, is drought tolerant, has low nutrient requirements, provides high oil
yields, and requires low labour inputs. However, those advancing these claims failed to
utilize scientifically sound information.
Based on this advocacy, in 2007 the national daily Kompas announced
international jatropha investments in Central Sumba district, on the island of Sumba in
NTT. The new investments encompassed an area between ten and twenty thousand
hectares, and up to 100,000 hectares in East Sumba (Biopact 2007). The provincial
government website advised that a total of 2,177,456 ha would be available for jatropha
cultivation in the whole province (NTT Government 2009). The sheer size of these
figures indicates the possibility of virtual land acquisitions. Checking against government
statistics regarding ‘empty land’, it is apparent that in 2008 42% of NTT remained unused
(BPS-NTT 2010). This suggests there is ample land for agricultural enterprises in these
districts. Given this, the question remains why these lands remained uncultivated. To
realize plans for 20,000 hectares of plantations in Central Sumba, developers would need
to increase plantation areas by 400 per cent, encompassing about a quarter of all the
‘empty land’. As the land has poor infrastructure (or none at all), is undulating, has little
15
water (no irrigation), and poor soil fertility, planners might consider it as ‘marginal’ to
productive agriculture (GFA 2008). Additionally, these districts of NTT are sparsely
populated. Consequently, very little labour is available locally. Large scale plantations
would also require well managed logistics and marketing (Strydom 2006), a challenge in
this remote frontier. The reality that these circumstances do not favour successful
plantations further supports the suspicion that this might be a case of virtual land
grabbing. However, if cultivation is not the real purpose, what could make such plans
profitable?
The first answer in the case of jatropha plans is subsidies. During the period 2005-
2008, in Indonesia and many other countries (Ariza-Montobbio 2011, Hunsberger 2011),
government policy and legislation were interlinked with budgets and international
subsidy flows driving jatropha activities. The district Agricultural Service in West Sumba
implemented a jatropha introduction program, distributing seeds and inputs. Village
agricultural extension workers explained cultivation methods for commercial purposes to
farmers. The state owned enterprise PT Rajawali Nusantara Indonesia (PT RNI)
implemented a demonstration plot close to the capital Waingapu in 2006-7. PT RNI
commissioned local producers in Sumba – including a member of the East Sumba District
Parliament – to produce many thousands of jatropha seedlings; a large percentage of
which were never planted or died in the nursery (Vel 2008, Vel and Makambombu 2010).
Actual cultivation andpost-harvest activities, including trade, processing and transport,
were apparently not included in the Ministry of Agriculture's projects.
Subsequent research revealed that large scale land acquisitions for jatropha had yet
to eventuate. Apparently the actors involved in this jatropha program never intended to
grow jatropha and produce biodiesel: they just harvested subsidies.The state had provided
many jatropha related subsidies (Dillon et al. 2008, 36-43). These included interest rate
subsidies, agribusiness development programs, and infrastructure subsidies, tax reductions
for biofuel-related investments, training programme support, and research and
development budgets. Consequently, many jatropha related activities involved linking
state agencies with each other in a subsidy chain. Seen from this perspective, newspaper
reports regarding 100,000 hectares of land acquisitions underpinned a discourse that
supported budget grabbing among domestic actors and agencies.
The link between land acquisition plans, land permits and bank loans provides a
second rationale for virtual land grabbing. This feature is not confined to jatropha
projects: it is part of a pattern of 'failing plantations' in Sumba. The website of the NTT
Government (2009) provided two reasons for failing plantations. First, the rural
population had traumatic past experiences with estate development in NTT. These
projects had failed to bring economic benefits to farmers. Second, farmers wish to avoid
investing in cultivating estate or cash crops that lacked a stable market price. Indeed, in
interviews, farmers in Central Sumba explained that they had planted many jatropha
trees in 2006 after hearing positive news regarding the plant’s potential. Later they
stopped cultivating when they found out there were no marketing channels or processing
facilities. However, the reasons for non-implementation of announced large jatropha
schemes, or failing plantations lies elsewhere. Other actors – entrepreneurs, state
16
officials, and brokers have used the plans for purposes other than cultivating crops. While
they may have succeeded, 'plantation failure' has happened so often that we can see a
pattern.23
Sumba’s wealth of ‘empty lands’ attracted many potential investors in agricultural
projects. As in Central Kalimantan and Merauke, district governments in Sumba
encouraged commercial agricultural development for district economic growth, rural
employment, and district government's tax income. Plantation initiatives over the decade
to 2011 focused on jatropha curcas, maize, cotton, sugarcane, cashew or sorghum. Field
visits to the area where the plantations were planned revealed few operational activities.
Interviews with the local population, NGOs and the district government services
indicated the following pattern of experiences with plantation development in Sumba.
First, a high government official introduces an idea for a new cash crop. There is a
promising initial phase, and an Indonesian company responds by discussing potential
plantation sites with the district officials. An international company or foundation gets
involved as the investor (lender). Websites promote the idea and describe large-scale,
long term projects, promoting high expectations. An official ceremony occurs, where,
companies and the district government signs a 'letter of intent' or 'a memorandum of
understanding'. The local newspaper covers this signing ceremony and reports are posted
on the internet.
Second, a phase of limited implementation follows. The district government issues
a location permit for a much smaller area than the initial plans stated. This allows the
company to start exploratory activities, and obliges the company to negotiate with local
land owners about the terms for land use/acquisition, and to conduct an environmental
assessment. The company sets up some minor activities: building one road, and one small
warehouse, getting some equipment and making a fence and a sign board. Then the
company tries to persuade local famers to collaborate with the plantation, particularly
when this is a requirement for obtaining a bank loan. The plantation company employs a
few local people as 'permanent staff' and casual labourers to do seasonal work or to
construct fences. Part of the land is cultivated with the crop for one or two seasons.
Third, we see the phase of acknowledging failure. Typically, after several years,
activities end. Local informants describe instances where the company’s management
stated that the area was unsuitable after all, that the local population was uncooperative
(and sometimes even burnt the plantation), or that the company was in financial trouble.
There are always rumors about bankruptcy and plantation loans being used for other
purposes. Finally the company disappears from the district scene.
Plantation failure does not reflect the willingness or capacity of farmers to develop
cash crops. Farmers widely cultivate crops that have proven to be profitable. For
example, cashews and candlenuts flourish as cash crops. At first, government and NGOs
promoted these crops; but since 2009 small holders have been producing most of the
volume. With steady demand and prices, and a well-developed marketing channel, both
crops have proved suited to the agronomic conditions of Sumba.
For biofuel crops however, after the initial activities of promoting plans, exploring
sites and applying for budgets, grants and subsidies, in many cases agricultural
investments fail to materialize. Despite this, government officials welcome these land
17
deals –even lobbying aggressively to ensure they occur (Kugelman 2009, 3). The deals
may represent virtual land grabbing. In October 2011, we heard the pejorative term now
used to refer to companies that specialize in virtual land grabbing: the label 'PT Akan',
literally translated as ‘Will Do Pty Ltd', hints at the agenda behind the promise of future
realization.
Major incentives for virtual land grabbing, in the form of subsidies, are
highlighted in a report on subsidies for the biofuel sector in Indonesia, which describes
the ample availability of jatropha-related subsidies (Dillon et al. 2008, 36-43). These
included interest rate subsidies, agribusiness development programs, and infrastructure
subsidies, tax reductions for biofuel-related investments, training programme support,
and research and development budgets. As a likely consequence, many jatropha-related
activities involve state agencies linking with each other in a subsidy-receiving chain. Seen
from that perspective, newspaper reports regarding 100,000 hectares of land acquisitions
worked to create a discourse that supported budget grabbing among domestic actors and
agencies.
Consequently, the Jatropha case clearly fits the wider pattern presented in this
paper. Actual processes on the ground differ remarkably from the situation intimated by
the land development narratives of project boosters. The Jatropha phenomena would
seem to accord with the boom and bust cycle – high global prices and good prospects lead
to a flow in of investment that is never realized. However, as developmental scenarios are
consistently not achieved, another agenda becomes apparent: the use of permits to
capture linked budgets and subsidies as well as the rents associated with investments.
Thus Jatropha processes fits into our wider argument: as developmental narratives take up
new global concerns, they continue to legitimize large-scale land acquisitions, leaving a
heritage of failed large land schemes – in this case, as they remain spectral, there are
limited impacts on the ground.
While foreign capital in part drives land acquisition for jatropha plantations, the
subsidies and bank loans are mostly from domestic sources. In the next section the role of
international actors and capital is more apparent. Initiatives for reducing carbon
emissions from deforestation in developing countries have necessitated a similar pattern
of allocating large areas of land for green agendas.
Forests Forests Forests Forests and cand cand cand carbon arbon arbon arbon ttttrading rading rading rading
Finally, we now consider the fourth of our large enclosure processes: green
acquisitions associated with carbon sequestration. The global initiative aimed at reducing
the Emissions from Deforestation and Forest Degradation, known as ‘REDD,’ amounts to
another type of large-scale land allocation involving the injection of large capital
investments into remote forest frontiers. The REDD scheme depends upon financial
18
transfers from donor governments in highly industrialized countries to actors in
developing countries where greenhouse gas (GHG) emissions from forest conversions are
considerable. Among tropical countries, Indonesia ranks first and Brazil second as net
GHG emitters, together contributing approximately 50 % of global GHGs emissions
(Verchot and Petkova 2009). Under the initial proposal set out in the 13th Conference of
Parties under the United Nation Framework Convention on Climate Change in Bali in
2007, Indonesia would receive financial assistance to prevent further exploitation and
degradation of its forests (PEACE, 2007). Although the idea behind REDD is simple, the
'mechanism' is rather complicated. Local actors in a forest in Indonesia will only receive
compensation payments for their REDD activities following a long and successful process
of planning, calculation and negotiation. Any REDD project proposal requires approvals
for the activities implemented. Further, it needs to document the size of the emission
reduction, obtain a specified type of financing, and indicate how the benefits will be
distributed (Parker et al. 2009, 18). This requires a variety of expertise and involves a
multitude of actors. The scope of REDD has expanded to include carbon sequestration
from conservation, sustainable management of forests, and enhancement of forest carbon
stocks, now known as REDD+.
As in the cases discussed in the previous sections, there are huge claims regarding
the areas that will be allocated for REDD+ projects. Donors and implementing agencies
are engaged in a rush to develop REDD+ projects, and although the precise number
remains unclear, one report claimed that more than 60 REDD+ Demonstration Activities
are currently being proposed by bilateral donors, NGOs, and private companies (World
Bank 2011). For instance in Central Kalimantan, five REDD+ projects are listed,
encompassing 306,940 hectares; and a number of private companies have submitted
proposals for another 615,400 hectares (Satuan Tugas REDD+ 2011). At least three of
these projects are located in the former one million hectare rice project area discussed
earlier.
The economic interests at stake are large. Donor commitment to Indonesia
significantly increased after the G-20 meeting in Pittsburg in 2009. Here President Susilo
Bambang Yudhoyono announced the Government's commitment to reducing Indonesia’s
GHG emissions by 26 percent up to 2020. Estimates of the size of donor countries’ support
for REDD+ schemes in Indonesia vary from US$ 62 million (Satuan Tugas REDD+ 2011,
11) to US$ 4.4 billion over the several years from 2011 (Brown and Peskett 2011, 12). The
Norwegian government pledged US$1 billion provided that Indonesia succeeds in
reducing its emissions. As a first gesture, the Indonesian government issued a two-year
forest moratorium in 2011 to freeze issuance of new forest exploitation permits to exploit
natural primary forests and peat land.24
Four years after the Bali Conference, the institutional framework for
implementing REDD+ has yet to be established. It remains unclear which institution has
the authority to prioritize a location, choose the type of REDD+ scheme, and determine
the requirements to be met before a proposal for a REDD+ project will gain government
approval. As a consequence, it remains unclear how international funds will be spent. A
variety of actors has emerged, each advancing their own REDD+ agendas. Foresters argue
that in comparison to other land categories, peat areas store significant amounts of
19
carbon. Indeed, degradation of Indonesian peat lands and fire – for example caused by the
mega-rice project discussed above – has caused major carbon emissions. Given that
Indonesia has approximately half of the world’s tropical peat lands (around 21 million
ha), donors have focused on supporting REDD+ projects in outer island regions with large
peat-land ecosystems (DNPI 2011, 6).
Apart from environmental concerns, REDD+ also creates opportunities for
forwarding other agendas. As in the case of jatropha promotion, global discourses
articulate with domestic dynamics and produce unexpected and officially unintended
outcomes. To clarify this argument we focus on three types of actors: divisions of the
Ministry of Forestry, plantation companies, and regional governments.
According to state law, the Ministry of Forestry has authority over nearly all forest
land on which REDD+ activities will be applied. REDD+ provides a validation for further
conservation-justified enclosures in the forestry estate, and for reasserting forestry
department control over this vast area. By revaluing the carbon located in remote forests
as a commodity, this also provides a rationale for land uses that compete with oil palm,
timber plantation and mining enclosures.
The balance of power between different actors creates uncertainties. The Ministry
of Forestry is organized in several divisions who compete to promote different types of
forest activity. Powerful actors within the Ministry choose between policy options.
Meanwhile agricultural and timber interests continue to influence decisions over forest
land allocations. In 2010 the Minister of Forestry issued many mining concessions, while
applications for community forestry land piled up. Oil palm plantation companies also
lobby decision-makers strongly, in ways which risk corrupting the forest land allocation
process. The oil palm businesses association advocates that oil palm should be also eligible
to get a carbon credit (Creagh 2010). Meanwhile regional (provincial and district)
governments find REDD+ a useful tool for underscoring their autonomy and claiming
rights to make decisions regarding forest use. REDD+ connects these regional
governments to international actors eager to bypass levels of bureaucracy. However,
regional governments also weigh the benefits of REDD+ projects against the opportunity
costs of allocating the land for other economic purposes. Where REDD+ options of
combining REDD with oil palm plantations offer new revenue streams, this is very
attractive to regional governments.
Competition, and overlapping responsibilities and roles between different state
actors, contribute to poor policy coordination and contested property relations. These
affect pilot projects, even after official project approval. For instance in the case of PT.
Rimba Raya Conservation, in 2009 the Ministry of Forestry issued a letter allowing the
establishment of a carbon credit scheme, under a specific license, over approximately
90,000 hectare of state forest.25 However, the regional government had already issued a
license to a private oil palm company over part of that same area. The regional
government could have revoked the license, because the oil palm company had not yet
commenced plantation activity, which is a legal basis for rescinding nonperforming
projects that leave land idle and unproductive. Moreover, the area is deep peat land that,
according to law, should not be allocated to oil palm development. Instead of revoking
the license however, in 2011 the Ministry of Forestry chose to support the oil palm
20
investment, subsequently reducing the carbon sequestration scheme to 40,000 hectare of
the forest land area (Fogarty 2011).
The REDD+ issue plays into longstanding conflicts over the system for allocating
forest entitlements. REDD+ frameworks are widely seen as favouring those with
formalised property rights (Vatnet al. 2009, 68). If implemented in ways that enable
landowners to obtain formal property rights within the ‘forest area’, some argue that
REDD+ may provide customary landowners with a means to maintain a foothold on their
land vis-a-vis other policies and developments that threaten to displace them (Osborne
2011). But there is a risk that ‘the formalisation of property rights may exclude the rural
poor not only from access to REDD+ resources, but also from land in general’ (Vatnet al.
2009, 68). Further, carbon forestry restricts land uses in areas zoned for carbon
sequestration. Villager participation in carbon markets may work to constrain access to
important benefits that landowners may have enjoyed up until now (Osborne 2011).
However, REDD+ also creates space for civil society and community actors to advocate
recognizing indigenous rights in areas mapped within the forestry estate. The emerging
coalition of foreign REDD+ actors – including the Norwegian government – and local
people’s representatives together with NGOs, is attempting to use REDD+ as a means to
support the interests of local populations, including access to land and fair compensation
for land uses.
In summary, we can say that up to 2011, the land acquisition figures mentioned in
reports on REDD+ in Indonesia represent only the start of a long negotiation process.
They do not yet correspond with real ‘green appropriations’. In parallel with the other
cases, REDD+ land claims remain ‘virtual’, until it becomes clear who decides on land
allocations, exactly which activities will obtain REDD+ funding, and how benefit sharing
arrangements will work. Once again, in large part the dynamic interaction between formal
and vernacular processes will ultimately determine the extent to which legalized green
acquisitions lead to enduring land use changes.
DiscussionDiscussionDiscussionDiscussion
The combined energy, climate and food crises require new remedies and provide new
opportunities. As the solutions to climate-food and energy crises are relocated to frontier
areas, they imply a new ‘spatial fix’ that entails geographical expansion and restructuring
of developmental agendas (Harvey 2001, 24). Elaborate new macro-economic and
agribusiness agendas involve providing millions of hectares of agricultural and forest land
for acquisition or enclosure, to make the most of these opportunities. New developmental
discourses regarding green biofuels, carbon sequestration or food security provides the
foundation for new land acquisitions where particular actors can connect to real places,
promoting new land schemes. Despite the apparent novelty however, the new
acquisitions following these changes represent continuity with, rather than a clear break
from, earlier patterns of land use change. Policy shifts have always corresponded with
changes in technologies, market opportunities and state capacities in recognizable ways.
21
Enduring policy rationalities continue to be applied to ‘frontier’ spaces. Planners conceive
of ‘outer island’ places as spaces for the elaboration of ambitious national projects to
remould both places and ‘indigenous’ land uses in desired ways (McCarthy and Cramb
2009), typically in response to newly identified problems and solutions and technological
preferences. The pursuit of these agendas depends upon control of land. Indeed, as in the
colonial period, state legal formulations that prioritise property relations considered
‘legal’ and 'modern' over ‘customary’ and ‘indigenous’ relations remain the key to land
acquisition. Yet, vernacular processes are decisive for land tenure in ‘outer island
Indonesia’. Receiving formal development licenses from a state authority is actually just a
step in the process of land acquisition. Subsequently, obtaining property rights in the field
requires accommodating, compensating, co-opting or suppressing landowner claims
though various local negotiation processes. This gap also corresponds to a fissure between
normative developmental discourses describing what ought to be done and how actual
processes work out in on the ground and determining who benefits.
As we have seen, only a fraction of land acquisitions lead to on-ground projects.
While the reasons for the postponement or ‘failure’ of so many projects remain largely
unexamined, we find a clear logic underlying these phenomena. In many cases, ‘failed’
projects may have been successful in other ways: ‘virtual acquisitions’ provide
opportunities to appropriate subsidies, to obtain bank loans using land permits as
collateral, or to speculate on future increases in land values.
Land mapping processes and concession licenses are never entirely ‘dead letters’:
they provide the raw material for the next stage of land acquisitions. Too often ‘failed’
schemes can 'succeed’ as they become the basis for the next set of schemes in the ongoing
transformation of landscapes. Although the mega-rice project in Central Kalimantan
failed to provide national (rice) food security, it paved the way for competing agendas –
green acquisitions and oil palm projects.
Green biofuel and carbon sequestration discourses and food security policy
narratives compete with high commodity prices generated in international vegetable oil
markets to inflate the ‘bubbles’ that drive these land acquisition processes. In some cases,
a setback proves temporary: as the ‘bubble’ fails to burst, it provokes further investment
in land acquisitions. In other cases, falls in commodity markets and poor realization in
the field appear to deflate the ‘bubble’ until a new chorus of ‘spruikers’ emerges.26 The
fact that these rival investment agendas may compete in the same landscape only works
to speed up the process. As a new opportunity for investment emerges, demand for
particular types of land rises. As the bubble inflates, actors chase particular sorts of land
development licenses, including actors who lack the capital to implement a project. Once
land development licenses become an object of investment, any new actor proposing to
invest needs to buy out the existing licence. In such cases, it is easy to misread the large
numbers of licenses and project schemes: virtual becomes real.
In comparing the dynamics shaping the different enclosure processes examined
here, we find it important to distinguish between differences in timing, scale, mode of
transformation and outcome, as they relate to the characteristics of each commodity. In
22
the first case considered here, the one million hectare mega-rice project in Central
Kalimantan, President Suharto pushed a scheme to achieve national rice self-sufficiency,
applying all the capacities available to the developmental state. However, the plan made
little ecological sense. Weak and failing implementation – together with other rent-
seeking agendas – left a wide space between intentions and plans and field realities. Over
a decade later, after the demise of Indonesia’s developmental state, a similar food estate
plan took shape in Papua. In accord with policy settings that now privilege
decentralization and public-private partnerships, the regional government and the private
sector drove the project. In the planned Merauke food estate case, the politically charged
food security issue limited the prospects for a large scheme for rice production. Any new
food estate plans needed to be framed in terms of domestic ‘food security’ issues, as
projects legitimized to secure the domestic food supply rather than food for export. Land
tenure conflicts in Papua and national political resistance forced the plan to be
abandoned.
Oil palm development is also associated with large-scale speculatory land
acquisitions. Oil palm cultivation is very real and profitable, and large-scale land use
changes often ensue. With global demand booming, state planners announced ambitious
developmental targets. As the bubble has inflated, entrepreneurs have chased land
development licenses, including many who lack the capital to implement a project.
Virtual land acquisitions associated with oil palm are now very extensive: by 2010, 26
million hectares of oil palm plantation licenses had been issued, despite a capacity only to
plant around 500,000 hectares of oil palm each year.
In the case of Jatropha, land permits work as a means to access subsidies. ‘Green’,
environmental and poverty alleviation arguments in international discourse lent support
to agendas tied to this crop between 2003 and 2009. The Indonesian government
promoted jatropha cultivation, and allocated a considerable budget for research and
implementation by the agricultural service. Despite poor results in the field, optimistic
information about the crop’s potential, combined with its superficial yet well marketed
‘green’ image, continues to create new international investment flows. Virtual land
grabbing in the case of Jatropha often amounts to ‘budget grabbing’: successfully
appropriating government budgets and subsidies. It requires a continuous flow of
supporting information on corresponding land acquisitions. In fact, land permits are
collateral for bank loans, even before there is any activity in the field. Then, whenever a
plantation company allocates the loan for other purposes, and fails to implement its
proposed agribusiness activities, the land acquisition remains virtual.
In the years to 2012, the REDD+ boom has been driven by significant donor funds
and subsidies. As policy frameworks, the shape of future carbon markets, and tenurial
issues remain unresolved, these pilot projects remain virtual (forest) land acquisitions
rather than restored or conserved forests. Given the competing demand for land for
agricultural expansion, it remains unclear how REDD+ projects alone will halt the
expansion of oil palm or avoid displacing plantation development into forests outside
REDD+ project areas (Poffenberger and Smith-Hanssen 2009, 2).
23
ConclusionConclusionConclusionConclusion
In comparing across the four processes of land acquisition and enclosure, we find that
current changes continue well established historical trajectories of land transformation.
As we have repeatedly seen, there is a clear logic underlying the pattern of partial
realization or ‘failure’ of many large scale schemes. Further, we stress the importance of
interactions between formal and vernacular processes in determining the outcomes of
rural land development. Finally, we argue that many apparent cases of ‘land grabs’ are
better understood as virtual land acquisitions.
With respect to the second of these four arguments, we see dynamics working
against land scale land acquisitions that offer interesting contrasts with the forces
Polyanyi found as acting to slow down or even reverse the extension of market relations.
In his classic discussion, Polanyi (1944) described the emergence of protective counter
movements that materialize as social actors respond to the deleterious impact of market
relations. In the Indonesian case, we are yet to see effective counter moves to protect
local sources of livelihood and to de-commodify land. In many oil palm cases, rather than
cessation of commercial smallholder farming per se, smallholders tend to focus on
demanding more effective inclusion in the new market opportunities. Nonetheless,
developmental scenarios often continue to be problematised, resisted and only partially
realised as schemes confront the difficulty of vernacular land tenure processes that lead to
difficult land negotiations and extensive land conflicts. Ecologies and commodity price
fluctuations impede large-scale plans – whether it be buying up large areas for corporate
agriculture for food production or enclosing huge areas for other schemes. These,
together with the inchoate reactions of various actors cumulatively – albeit partially –
slow land acquisition processes.
Along with other researchers, we find that in the majority of cases domestic
investors are more important than foreign ones (Deininger 2011, 218). Developments
tend to occur within decentralized networks that involve national companies along with
domestic and international investors in transformative processes. This is because access to
land involves complex land transactions with farmers, state officials, brokers and agro-
industrial enterprises working at various scales. And even in the case of REDD+ schemes
that more clearly involve international actors, still domestic actors with their own
agendas will determine the success of implementation and the distribution of benefits.
The strength of actors in the global production networks of crops (such as those
considered here) requires knowledge and information. Especially in the case of REDD+
the procedures and processes for accessing subsidies are very complicated, increasing the
power of legal experts and brokers. Finally, the ultimate question concerns the impact of
large-scale land acquisitions – including virtual ones – on the livelihoods of local
smallholders and agricultural labourers. Policies and schemes – whether they are realized
or not – demonstrate a bias towards development models that are large-scale and involve
significant capital investments, rather than privileging labour-intensive initiatives that
support smallholder inclusion (Cotula and Vermeulen 2011). This involves the alienation
of large areas of land. As several analysts have argued, access to land ‘is strongly related to
poverty and inequality’ (Borras et al. 2007, 1). While livelihoods are becoming less tied to
the land across Indonesia, this trend is less pronounced in outer island Indonesia (Lokollo
24
et al. 2007). In the absence of effective safety nets, finding better livelihoods on smaller
areas of land is difficult. Further, the pursuit of improved livelihood occurs in the absence
of supporting rural policy, and in rural markets with a low capacity to absorb labour. In
the meantime, land can serve as a primary source of social security for the rural poor,
providing a basic means of livelihood, making food more available, and providing a buffer
against external shocks. Indeed, Indonesian research has found that 'there is a strong
correlation between agricultural land ownership and the magnitude of poverty’: ‘the less
land owned the higher the incidence and degree of poverty’ (Rusastra et al. 2008, 30).
From this perspective, large-scale land acquisition patterns are associated with ‘disruptive
shifts in land rights and increased land concentration’ (UN 2010, 5), a trajectory that does
not favour the poor. Even if acquisitions are virtual, there are opportunity costs: if there is
little activity in the field, local people may neither work for the plantation company nor
obtain secure access to the land concerned.
Advocates for alternative policies targeted at securing livelihoods for smallholders
need to be aware of the dynamics described here. Classic advocacy strategies tend to
target land reform. Whether the vexed question of land reform can ever be resolved,27 an
associated issue is of more pressing concern to local livelihoods: state policy supports
large-scale acquisitions linked with international investment associated with commodity
booms, together with green agendas, while insufficiently addressing the structural
constraints that limit smallholder production. Advocates for alternative policies might
strongly question arrangements that seek to attract large-scale investors with the offer of
‘free’ land or forest. Given the increasing value of land, the state is arguably in a much
stronger bargaining position to set the terms of investment in agrarian and forested
landscapes in ways that support smallholder inclusion. However, as the four cases in this
paper suggest, Indonesia is yet to see the political conditions that might ensure that state-
based actors pursue policies that explicitly privilege the interests of local smallholders and
agricultural labourers.
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1 John McCarthy lectures in the Australian National University’s Crawford School of Economics and
Government and is a Fellow at the University’s Research School of Asia and the Pacific. John carries out
research into agrarian change, land tenure, food security, environmental governance and natural resource
policy. He is the author of The fourth circle: a political ecology of Sumatra’s rainforest frontier (Stanford
University Press, 2006). His current research grants are concerned with agrarian transitions and oil palm,
and social capital, livelihoods and food security. This article was written under a fellowship from the
Koninklijk Instituut voor Taal-, Land- en Volkenkunde (KITLV), Leiden University. Email:
john.mccarthy@anu.edu.au
Jacqueline Vel is a socio-legal studies researcher at the Van Vollenhoven Institute for Law, Governance and
Development of Leiden University. Since 2010, she is coordinator of the international, interdisciplinary
31
research cluster ‘JARAK: the commoditization of an alternative biofuel crop in Indonesia’ in the
Indonesian-Dutch research program ‘Agriculture beyond Food‘. She worked in Sumba for 6 years. Her
works include Uma politics: an ethnography of democratization in West Sumba, Indonesia 1986-2006
(2008), Uma Economy (PhD thesis, 1994; revised Indonesian translation 2010) and articles about local
politics, land rights, and access to justice. Website: http://law.leiden.edu/organisation/
metajuridica/vvi/staff/jacqueline-vel.html; Email: j.a.c.vel@law.leidenuniv.nl
Suraya Afiff is a lecturer in the Department of Anthropology Graduate Program, Faculty of Social and
Political Sciences at the University of Indonesia. Since 2009, she also serves as the head of the Center for
Anthropology Studies in the same university. Her focus of study includes issues of land tenure and conflicts,
environmental and agrarian movements, the political economy of environmental change, and recently also
REDD in Indonesia. Since 2010, she is a postdoctoral researcher at KITLV (Leiden) in the cluster ‘JARAK:
the commoditization of an alternative biofuel crop in Indonesia’ in the Indonesia-Dutch research program
‘Agriculture Beyond Food’. Email: safiff@gmail.com
To cite this article: John F. McCarthy, Jacqueline A.C. Vel & Suraya Afiff (2012): Trajectories of
land acquisition and enclosure: development schemes, virtual land grabs, and green acquisitions in
Indonesia's Outer Islands, Journal of Peasant Studies, 39:2, 521-549 3De Sousa Santos (2006) has used the palimpsest as a metaphor to characterize the intricate ways in which
very different political and legal cultures and very different historical durations are inextricably
intertwined in contemporary Mozambique. 4Here we use the term ‘vernacular’ to refer to socially embedded land allocation and transaction processes
that do not conform to state regulations (cf Chimhowu and Woodhouse, 2007). Often there is a great deal
of ambiguity regarding rights of access and compliance with rules during such processes, particularly as
outcomes emerge through negotiations and disputes that involve the adaptation of customs and norms with
powerful dominant interests and the impact of state licensing processes. For a discussion relevant to the
Indonesian context, see McCarthy and Warren (2008). 5Land acquisition for purposes other than listed on the license or for speculative purposes is technically
illegal under Indonesia’s agrarian law, even though this is rarely enforced.
6i.e. in terms of the GRAIN definition (GRAIN 2008).
7 The inside-outside distinction is typical for a ‘colonizer’s model of the world’ (Blaut 1993). 8See McCarthy (2012) which provides a more detailed discussion of this case.
9 Such transformations have been relatively easy in forest areas. Following Indonesian law on forestry
(41/1999) around 60 percent of the whole country’s land is defined as state forest. 10 A look at the Investment Board’s website gives an idea about the number of permits and
recommendations required: http://www4.bkpm.go.id/contents/p12/application-forms/15 (last accessed on
27-7-2011)
12 The actual size of the project area is approximately 1.4 million hectares. 13 There are also efforts to improve production in rice producing areas (eg improved pest management), and
other policies, including ensuring BULOG stockpiles are sufficient to avoid food shortages. 14Wall Street Journal 11/7/08 cited in Down to Earth (2008). 16 To date the expansion does not seem to be driven by biofuel markets – although lots of investments were
put into biofuels just prior to 2008, the rapid decline in the oil price put biofuel issue on ice for some time 17This is a reason for local land owners' and license holders' lobby at district government to spend their
budgets on infrastructure development.
32
18
The 95 year lease provision of the 2007 Foreign Investment law was thrown out by the Constitutional
Court as unconstitutional and in contravention of the Basic Agrarian Law in 2008. 19
See Borras and Franco (2010) and for an analysis relevant to oil palm see McCarthy et al.(2011). 20 According to one report, there were 660 conflicts in 2010 compared to 116 conflicts in 2009. (Pontianak
Post 2011) 21
For example, see Greenpeace Kitkat TV commercial (Greenpeace 2010). 22In 2009 National statistics listed NTT as 31 out of 33 in its ranking of provinces according to their Human
Development Index (BPS 2010). 23Since 2006 JacquelineVel has been observing the developments in large scale commercial agriculture in
Sumba, one of Indonesia's outer islands (Vel 2008, Vel and Makambombu 2010). 24This was agreed in a Letter of Intent between the Government of Indonesia and the Norwegian
government. 25
The license concerned an ecosystem restorationscheme (BPPHP Wilayah XII, 2010).
26A spruiker is ‘someone who toots their own horn’, a tout, or ‘a person standing outside a place of business
trying to persuade patrons to enter, or vigorously trying to persuade customers to purchase their wares’.
http://en.wiktionary.org/wiki/spruiker
27
For an overview of the difficulties facing land reform, see Lucas and Warren (2003) and McCarthy (2012).
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